Study: Millennial student debt impacts many people
CHARLOTTE, N.C. – Oct. 4, 2016 – Nearly two-thirds (63.3 percent) of millennials graduated, or will graduate, with student debt, and 46.5 percent currently owe money on their student loans. The burdens of student debt, however, extend far beyond just the borrowers, implicating education, occupations, spending and the economy.
Those are the findings of a new survey of 1,338 millennials – those born between 1980 and 1995 – who enrolled in at least some post-secondary education, conducted by LendingTree. The study ranked all fifty states and top 100 cities based on average student debt, which was $27,162 per person.
In Fla. (No, 9 nationwide), the average graduate owes $28,768.
According to the survey, millennials pay roughly $317 per month towards their student loan repayment. When asked how much student debt affects his/her spending ability, 30.54 percent answered, “Very much,” 30.40 percent answered, “Somewhat,” and another 14.91 percent said student debt had “very little” impact on their spending.
Less than one in four (24.15 percent) feel no effects of their student debt in relation to their spending.
Millennials currently employed report an average salary of $48,146. When factoring in federal and state income taxes, Social Security, 401k, Medicare and insurance costs, a typical millennial would net roughly 70 percent of their gross income, depending on exemptions, state and elections.
In this example, monthly take-home pay would total $2,808, and payment towards student loan debt would consume approximately 11.3 percent of the average millennials’ net income each month. Because student loan payments eat roughly $317 per month on average, millennials may be forced to delay certain purchases or life events due to their debt obligation.
When asked which investment, purchase or life event has been delayed due to student debt repayment, the most frequently cited were travel (53.27 percent), purchasing a home (45.31 percent), buying an automobile (44.74 percent) and saving for retirement (38.07 percent).
If student debt obligations were to hypothetically be absolved, millennials said that the newly-freed funds would go towards saving for emergencies (53.98 percent), buying a home (41.76 percent), retirement savings (31.68 percent) or be spent on travel/vacations (31.25 percent).
More than half (55.9 percent) of those surveyed have feelings of financial regret related to their post-secondary education. The most common is that he or she wished they went to a more affordable school (29.05 percent), followed by wishing they chose a different major or area of study (20.81 percent), or they should have attended a different school for their money (14.05 percent).
Unfortunately, 10.41 percent feel as though they shouldn’t have attended college at all, and 10.14 percent feel overeducated, paying for education beyond what is necessary for their career.
Not only were school choices and areas of study impacted by student debt fears, but 38.34 percent feel that having student debt affected his/her career or occupation choice.
10 states with the highest outstanding education related debt per student.
1 Washington, D.C. $39,832.12
2 Maryland $32,567.41
3 Illinois $29,865.77
4 Georgia $29,788.87
5 Colorado $29,759.70
6 Virginia $29,469.87
7 California $29,112.75
8 New Jersey $28,991.27
9 Florida $28,768.51
10 Connecticut $28,398.35
10 cities with the highest outstanding student debt
1 Boston, Mass. $43,102.16
2 Irvine, Calif. $42,490.77
3 San Francisco, Calif. $39,963.43
4 Washington, D.C. $39,806.71
5 New York, N.Y. $37,401.15
6 Scottsdale, Ariz. $37,400.56
7 Madison, Wis. $36,260.33
8 Seattle, Wash. $35,892.31
9 Irving, Texas $35,781.79
10 Oakland, Calif. $35,144.33
An excel spreadsheet of the city and state rankings based on student debt and student loan amounts can be downloaded here. <http://marketing.lendingtree.com/graphics/Student-Loan-Data-9-2016.xlsx>
© 2016 Florida Realtors®